Designed to provide broad exposure to the Investment Grade Corporate Bond ETFs category of the market, the FlexShares Credit-Scored US Corporate Bond ETF (SKOR) is a smart beta exchange traded fund launched on 11/12/2014.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $731.65 million, this makes it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. SKOR is managed by Flexshares. Before fees and expenses, SKOR seeks to match the performance of the Northern Trust Credit-Scored US Corporate Bond Index.
The Northern Trust US Corporate Bond Quality Value Index measures the performance of a diversified universe of intermediate maturity, US - dollar denominated bonds of companies with investment grade credit quality, favourable valuations and enhanced short-term and long-term solvency.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 4.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Cashaccounts for about 2.19% of the fund's total assets, followed by Salesforce Inc Callable Notes Fixed 4.9%-9-15-2031 and Bank Of Nova Scotia/the Callable Bond Variable-8.63%-10-27-2082.
The top 10 holdings account for about 6.13% of total assets under management.
Performance and Risk
So far this year, SKOR has added roughly 0.3%, and was up about 4.06% in the last one year (as of 07/15/2026). During this past 52-week period, the fund has traded between $48.04 and $49.50.
The fund has a beta of 0.22 and standard deviation of 3.62% for the trailing three-year period, which makes SKOR a high risk choice in this particular space. With about 1652 holdings, it effectively diversifies company-specific risk .
Alternatives
FlexShares Credit-Scored US Corporate Bond ETF is a reasonable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
State Street SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB) tracks Bloomberg Barclays Intermediate U.S. Corporate Index and the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) tracks Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. State Street SPDR Portfolio Intermediate Term Corporate Bond ETF has $11.6 billion in assets, Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares has $66.52 billion. SPIB has an expense ratio of 0.04% and VCIT changes 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond ETFs
Bottom Line
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FlexShares Credit-Scored US Corporate Bond ETF (SKOR): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).